Rob Barnett is in a "sleepless snit." Luckily, it's the good kind. He's suffering through sleepless nights because his online video network, My Damn Channel, is celebrating its third anniversary. It announced the winner of its "3some" user-submitted video contest this morning. And his constantly ringing phone may also have something to do with it. "You wouldn't believe the amount and the quality of incoming calls we're receiving from companies that want to work with us," Barnett says in his raspy New York growl. Plus, My Damn Channel recently landed a $4.4 million second round of venture capital and announced an ambitious new programming slate that includes a new season of the Illeana Douglas hit Easy to Assemble and series from comedian and filmmaker Mark Malkoff (Colbert Report) and Will Janowitz (The Sopranos). And there's more on the way. Once Barnett warmed up, we talked about why he left a successful career in old media, how he's earned the "HBO of the Internet" tag, and what's next for him in Web video.
Fast Company: Why did you start My Damn Channel three years ago?
Rob Barnett: I had two tours of duty in radio, and a long stretch in TV, working for MTV and VH-1. I worked in film as well. I decided it was time to stop working for other people. Also, I had been in enough meetings with the kings and queens of media to know that these guys were behind the 8-ball. For the first time, they were late to the picnic. The Internet had the most rebellious energy I'd seen since the punk movement, and yet, they were dismissive of it. I realized that if I got out on my own, I could build something bigger, better, and faster than I could at a traditional media company, even if I had one of those titles like head of new media or head of digital.
FC: How did you decide to do original video for the Internet?
RB: My business partner, co-founder, COO, and smarter half, Warren Chao, did a great analysis of the three doors we could walk through. He's everything I'm not: A lawyer, a former venture capitalist, and business development guy. Number one, we could go the YouTube route, aggregating videos from all over the Web. That didn't seem realistic. Number two, we could repurpose existing video content—what you would now call the Hulu model—but I wasn't sitting on any huge libraries of content. Or number three, we could focus on the creation of the best original content. That made sense to me. I could steal shamelessly from the HBO/Showtime playbook.
FC: People in the Web video world have told me that My Damn Channel is the only one that deserves the "HBO of the Internet" moniker. So what's the playbook?
RB: Work with the best talent. Be selective. Come with the best batting average. Promote the living shit out of everything. It's naïve to throw stuff up online and hope it does well. We will pre-promote shows weeks in advance. It is so much easier to go with established talent who know how to get an audience. Not that we're not going to try other things. That's the benefit of having your own shop. The most popular show we have ever done is called You Suck at Photoshop. These guys were not established. They were two guys from Covington, Kentucky that I met by accident. But their stuff was uniquely geared to this new audience. It had that Web DNA, and the series received more than 20 million views. We may have found the next You Suck at Photoshop guys through this "3some" user-generated contest we did for our third anniversary. We don't normally accept user-generated videos, but I thought, holy shit, we've never even done a contest in three years.
FC: Why do you think you've been successful with branded entertainment?
RB: Because the entertainment comes first, and the brands are our partners. We're introducing brands to the possibilities of Web video every day. The same with ad agencies. It takes time for people to educate themselves. I am not one of these people who bitches about the ad sector. If you compare the Web video world to the evolution of cable television, we're doing fine. Things are moving much quicker. It doesn't take a rocket scientist to see that fewer people are watching 30-second ads, that banner ads aren't the most engaging form of advertising. More people and advertisers are coming, and we're getting larger by the day.
FC: What other revenue opportunities are out there besides advertising?
RB: We also make money from licensing, and in the fourth quarter of this year, we'll launch paid premium programming. We're working on a music thing with legendary producer Don Was, who's programmed our music content from the beginning. He can book anyone to do anything, and we'll offer more than just another great show. You can't get people to pay for milk if they've been drinking it for free.
People will pay for unique experiences. David Wain has done 32 episodes of his series Wainy Days, and on very short notice, we booked an event in New York at the 92Y Tribeca with David and a lot of the stars he's had on the show, including Paul Rudd, and some music. We charged $18 a ticket and sold out in three or four days. The place was mobbed. I don't know if you'll pay for episode number 33 of Wainy Days, but you'll pay for this.
FC: What's the biggest difference between My Damn Channel and your previous media life?
RB: In traditional media, we used to bitch all the time about the ratings services Nielsen and Arbitron when the numbers weren't pleasing to us. We complained about the methodology—unless, of course, the numbers were good. Online, the numbers are right there. The audience is right there. You don't need any focus groups; you don't have to wait months to slightly course-correct any mistakes, because the audience is right there in your face.
We're hiring artists we love and putting them in a situation where there are no notes from executives. I once worked on a television show with [the Sex Pistols'] Johnny Rotten. And we got these final, midnight notes from the network. The show was called Rotten TV. I told them, Look, we're either going to take this show as is or not bother airing it. [Ed. Note: Rotten TV lasted three episodes.] The artists are in control here, which is a really new experience for them. The only suit is me, the guy who never wears suits.
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A version of this article appeared in the September 2010 issue of Fast Company magazine.